28-Oct-2022: Shri Nitin Gadkari rings the bell at Bombay Stock Exchange  in Mumbai marking the listing of NHAI InvIT Non-Convertible Debentures

Union Minister for Road Transport and Highways Shri Nitin Gadkari rang the bell at Bombay Stock Exchange at 9.15 am today in Mumbai and ceremoniously marked the listing of NHAI InvIT  Non-Convertible Debentures . Secretary MoRTH and Chairman, NHAI  Mrs. Alka Upadhyaya was present along with other dignitaries on the occasion. Shri Gadkari thanked all the institutional and retail investors for their overwhelming response and reposing faith in credibility of NHAI.

Shri Gadkari said the listing of InvIT NCDs on Bombay Stock Exchange is historic as it marks the new dawn for People's Participation (Jan-Bhagidari) in Infra Funding. He said we have reserved 25% of NCDs for Retail Investors. The round 2 of InvIT has been oversubscribed almost 7 times in just 7 hours of its opening. It offers an effective yield of 8.05% per annum with highest credibility, he added. The Minister said he felt very happy that we could finally give the Retail Investors (retired citizens, salaried individuals, small and medium business owners) an opportunity to participate in the Nation-Building activity. The minimum investment slab is just Rs 10,000 ,he added.

Shri Gadkari  said internal rate of return in road infrastructure projects is very good. He said 26 greenfield expressways and several other projects are in pipeline which will provide more investment opportunities. He asked investors to continue their support to infrastructure projects to realise the vision of 5 trillion dollar economy of Prime minister Shri Narendra Modi .He said infrastructure projects are economically viable and will give good returns.

Shri Gadkari said Bonds are a great opportunity to realize Prime Minister Shri Narendra Modi Ji's vision of Aatmanirbhar Bharat. He said huge investments in infrastructure especially roads, are crucial to the socio-economic development of our country & he was confident that more retail investors will take part in next rounds and gradually overtake institutional investors.

27-Oct-2022: NHAI InvIT again surpasses all the expectations.

The round#2 of InvIT has been oversubscribed almost 5 times in 10% of the scheduled tenure.

This round is special because 25% of the NCDs (Non-Convertible Debentures) are reserved for retail investors.

Union Minister MoRTH Shri Nitin Gadkari was driving this agenda of giving an opportunity to the ordinary citizens of our country to invest in the Infrastructure space.

With this option retired citizens, salaried individuals, small and medium business owners have a great opportunity to invest in building new India and at the same time get healthy returns (of at least 8.05% per annum)

Tomorrow is the historic day as these InvIT NCDs will be listed on BSE and Shri Gadkari will ring the bell marking a great beginning for public participation in Infra funding.

12-Oct-2022: NHAI InvIT raises funds through follow-on issuance

National Highways Infra Trust (NHAI InvIT), the infrastructure investment trust sponsored by National Highway Authority of India (NHAI) to support Government of India's National Monetization Pipeline, has raised a sum of Rs 1,430 crore from domestic and international investors through placement of its units, for part funding its acquisition of three additional road projects from NHAI.

The placement of units with institutional investors, witnessed strong demand from both existing investors, who reposed their commitment by participating in the process, as well as new investors. The units have been subscribed by a gamut of institutional investors including Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan Board, State Bank of India, SBI Pension Fund, SBI Mutual Fund, IOCL Employee Provident Fund, L&T Staff Provident Fund, Rajasthan Rajya Vidyut Karamchari Pension Fund, TATA AIG and Star Union Daiichi Life Insurance. NHAI subscribed to the units through preferential allotment to maintain its unitholding of at least 15%. The units were subscribed through a book build process at INR 109 per unit, at a premium over floor price of INR 107.12 per unit.

In addition to the above, NHAI InvIT has also filed prospectus with SEBI for issuance of Non-Convertible Debentures (NCDs) to raise Rs 1,500 crore. The NCDs would carry a coupon of 7.90% payable semi-annually and would be available for subscription by both retail and institutional investors.

The success of the follow-on issuance of units by NHAI InvIT demonstrates its attractiveness to sophisticated institutional investors. Their participation in this round supports National Monetization Pipeline, in which NHAI has the largest share and is crucial for Prime Minister’s and Minister of Road Transport and Highways’ vision of development of roads sector in the country.

“In a historic first, NHAI InvIT has, through a transparent & market driven process, raised the funds in a follow-on issuance with entire premium accruing to NHAI.  We thank the existing investors for their continuous faith in NHAI InvIT as well as new investors for coming on board in making NHAI InvIT a success,” said Alka Upadhyaya, NHAI Chairperson.

Launched in November 2021, NHAI InvIT had raised Rs 8,011 crore for NHAI in its maiden round, with initial portfolio of five operating toll roads of aggregate length of 390 km. With the acquisition of three additional road projects, NHAI InvIT will own, operate and maintain a portfolio of eight operating toll roads with an aggregate length of 636 km spread across the states of Gujarat, Karnataka, Maharashtra, Madhya Pradesh, Rajasthan, Telangana and Uttar Pradesh, with concession period ranging between 20 to 30 years.

11-Sep-2020: Secretary RTH addresses investors meet on InvIT

The Government has embarked upon a transformational programme of implementing National Infrastructure Pipeline to realise the potential of Indian Economy. Road development is one of the most important component of this programme, contributing over a quarter of the planned expenditure. Expansion of roads will give a boost to the economy by reducing logistic costs, connect, hinter-land to hubs, and cater to rapid growth in vehicle ownership.

The Union Cabinet has already approved setting up of Infrastructure Investment Trust(s) (InvIT). This will enable National Highways Authority of India (NHAI) under the Ministry of Road Transport and Highways to monetize completed National Highways that have a toll collection track record of at least one year and NHAI reserves the right to levy toll on the identified highway. The Ministry of Road Transport and Highways has been making concerted efforts for attracting potential investors to participate in this ambitious effort.

Addressing a meeting of leading and large investor groups in New Delhi last evening, Secretary - Road Transport and Highways Shri Giridhar Aramane said, the Ministry has plans for construction of over 50 thousand kilometres of Highways, a majority of those will be 4 and 6 lanes wide. He called upon the investors to consider that InvIT has scope for broad basing the investor groups. It promises to be an attractive vehicle for mobilising funds for road development. He assured investors that the assets base of InvIT will be selected carefully to yield attractive returns and mitigate inherent risks. He said, the proposed roads have a long history of tolling, and thus the price discovery is likely to be handsome. The Secretary also assured that efforts will be made to facilitate realisation of value for investment.

Shri Aramane added that the functioning of the Investment Manager will be democratised by bringing investing partners into Board of Directors to manage the Company in a professional manner. He said, the Project Managers will also be selected on professional and efficiency basis.

8-Sep-2020: Cabinet approves asset monetization of subsidiaries of Power Grid Corporation of India limited through infrastructure investment trust

The Cabinet Committee on Economic Affairs, chaired by Prime Minister Shri Narendra Modi, in a path breaking reform, has approved monetisation of assets of POWERGRID, a  Public Sector Undertaking (PSU) under Ministry of Power, through Infrastructure Investment Trust (InvIT) model. This is the first time any PSU in Power Sector will undertake asset recycling by monetising its assets through the InvIT model and using the proceeds to fund the new and under-construction capital projects.

This approval would help POWERGRID to monetise in the first lot, assets with gross block value of more than 7000 crore. These assets, which are mainly High Voltage Transmission lines and substations, are held by POWERGRID in form of Special Purpose Vehicles (SPVs). The proceeds from the asset monetization would be deployed by POWERGRID in their new and under-construction projects.

Background: POWERGRID, a public limited company under the administrative control of the Ministry of Power, Government of India, started its commercial operation in the year 1992-93 and is today, a Maharatna company, engaged in the business of power transmission. The Company, along with its wholly owned subsidiaries acquired through the Tariff Based Competitive Bidding (TBCB)process, owns and operates a pan India transmission network. The Company meets its fund requirement for its Capital Expenditure (CAPEX) through its internal accruals and debt.

The Budget 2019-20 emphasized investment led growth and indicated that new and innovative financial instruments including Infrastructure Investment Trusts (lnvITs), have been launched as part of the brown field asset monetization strategy for augmenting infrastructure investment.

The Cabinet Committee on Economic Affairs has accorded approval to the POWERGRID to monetise transmission assets held in SPVs through InvIT model. The asset monetisation through InvIT by POWERGRID is a first for the Power Sector PSU. The proceeds from the asset monetization would be utilized by POWERGRID for its CAPEX and the premium generated would augment the net worth of POWERGRID.

In the first block, POWERGRID would monetize assets with gross block of more than Rs7000 crore. Based on the experience gained, further monetization shall be carried out in future.

Asset recycling is a key strategy of the Government of India to release the capital invested in operational assets and the proposed InvIT of POWERGRID would attract both domestic as well as global investors including Sovereign Wealth Funds. Sale of assets to InvITs is a way of accessing long term, relatively cheap finance required to fund infrastructure projects in Transmission Sector. The CAPEX plan of POWERGRID for next two years (2020-21 and 2021-22) is Rs. 20,500 cr. The Government of India has enacted an enabling regulatory and taxation framework for InvITs and the proposed InvIT by POWERGRID would deepen this market.

The InvIT would provide an opportunity to the general public and institutional investors such as Pension Funds, Mutual Funds, to benefit from this investment opportunity and participate in the growth of Indian Infrastructure Sector.

11-Dec-2019: Cabinet authorises NHAI to set up Infrastructure Investment Trust and monetize National Highway projects

The Union Cabinet has given its approval to the proposal of Ministry of Road Transport and Highways, authorizing National Highways Authority of India(NHAI) to set up Infrastructure Investment Trust(s) (InvIT) as per InvIT Guidelines issued by SEBI. This will enable NHAI to monetize completed National Highways that have a toll collection track record of at least one year and NHAI reserves the right to levy toll on the identified highway.

Impact:

InvIT as an instrument provides greater flexibility to investors and is expected to create the following opportunities:

• Generation of specialized O&M Concessionaires.
• Attract patient capital (for say 20-30 years) to the Indian highway market, as these investors are averse to construction risk and are interested in investment in assets which provide long-term stable returns.
• Retail domestic savings and corpus of special institutions (such as mutual funds, PFRDA, etc.) to be invested in infrastructure sector through InvIT.

Background: Roads and highways are the lifeline of the economy, connecting remote and far-flung areas and ensuring efficient transportation on regional as well as pan-India basis. Development of National Highways has a multiplier effect in terms of facilitating trade and enhancing the overall economic development of a region.

In October 2017, Government of India launched Bharatmala Pariyojana, which is the flagship highway development programme of Government of India for development of 24,800 km of roads for a total investment of Rs. 5,35,000 crore.

Given the magnitude of the Bharatmala program, NHAI would need adequate funds to complete the Projects within the prescribed timelines. As a part of this exercise, a workable option is to monetize the completed and operational NH assets to unlock their value and offer attractive schemes to private players to invest in construction of National Highways.

Implementation: Using new and innovative financing vehicles has become inevitable for organisations like NHAI that have limited existing sources of funds. The then Finance Minister, in his Budget Speech of year 2018-19, had stated that NHAI may consider organizing its road assets into Special Purpose Vehicles and use innovative monetizing structures such as Toll, Operate and Transfer model and Infrastructure Investment Trusts (InvlTs).

Based on the learning and experience, NHAI has been actively working on setting up an InvIT to monetize its completed and operational national highways projects with the objective of mobilizing additional resources through capital markets.

NHAI's InvIT will be a Trust established by NHAI under the Indian Trust Act, 1882 and Securities and Exchange Board of India (Infrastructure Investment Trusts) Regulations, 2014. The InvIT Trust will be formed with an objective of investment primarily in infrastructure projects (as defined by Ministry of Finance). InvIT may hold assets either directly or through an SPV or a holding.